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The Right Rx: Managed Care

November 24, 1991

Editorials

THE RIGHT Rx: MANAGED CARE

Democrat Harris Wofford's capture of a U.S. Senate seat is a harbinger of the 1992 election in one respect: Health care was a critical issue in the Pennsylvania campaign. And the Bush Administration, now under pressure to devise its own health care blueprint, seems sure to hustle out a plan before the election.

Its program will join a host of proposals already thrown into the hopper by Democrats, who believe they can capitalize on an issue with broad appeal (page 28). The explosion of activity is a welcome sign that the government will at last take a serious look at reforming the medical system.

Most plans under consideration aim to provide coverage to everyone'a laudable goal. But any reform effort should also provide some incentive to reduce spiraling costs.

The proposal with perhaps the broadest support right now is the DemocratsU Rplay or payS scheme. This plan would require employers to play, by offering workers insurance coverage, or else pay a tax into a government fund to buy coverage for the uninsured. But it does little to curb prices or doctorsU penchant for ordering ever more services.

A proposal backed by conservatives would provide vouchers to let individuals buy their own coverage, thus replacing employer-sponsored plans. But this scheme likewise provides no incentive to keep costs down.

Yet another plan -- a single-payer system modeled on Canada's -- would provide universal coverage and allow the government to control costs. But it sets up a cumbersome bureaucracy that, as one wag puts it, would offer Internal Revenue Service sensitivity and congressional efficiency at Pentagon prices.

The best solution is the managed-care concept described -- and endorsed -- by Business Week in the Oct. 7 issue. It has the backing of Democratic Presidential aspirant Paul E. Tsongas. Managed care combines free-market elements with government regulation. Consumers would be able to choose among large health care networks, receiving coverage from their employers or through quasi-governmental regional insurance brokers, either of which would have enough buying clout to keep prices in line. Any effective reform measure needs to be comprehensive to make sure that cures for the system aren't worse than its current ills. Managed care is the only proposal that fits the whole bill.